How Has the Financial Condition of Private Companies Changed in Recent Years?

As you might have expected, the financial condition of private companies have changed substantially over the past twelve years, as the country experienced the end of a housing boom; a financial crisis that nearly took down Wall Street; the deepest economic downturn since the Great Depression; and five years of one of the country’s weakest economic recoveries. But you might be surprised to learn how those financials have shifted. The changes aren’t all as one might have predicted.

Let’s start with the obvious. Net profit margins at private companies have recovered steadily since the end of the Great Recession. Using its proprietary database of financial statements of more than 100,000 private companies with less than $10 million in yearly sales, financial data provider Sageworks found that profit margins at private companies increased from a low of 3.2 percent in 2009 to a high of 8.5 percent in 2014.

How Has the Financial Condition of Private Companies Changed in Recent Years?